There are several myths regarding real estate investing that should not affect your decision to engage in the business. This is especially difficult if you are new to the game. It may be difficult to discern reality from fiction in the real estate sector. With numerous myths blooming from various holes. While certain misconceptions may appear to be innocuous, they might nonetheless prevent you from succeeding in real estate.
Due to the market situation and political attention on real estate. The general public is frequently perplexed about the business. People who are unable to distinguish between myths and realities are prone to a variety of misunderstandings. Asset Yantra attempts to clarify the industry’s perplexing notions.
Real Estate is frequently viewed with skepticism and contempt. Doubts and half-truths have spread several misunderstandings regarding this industry in the general public’s thinking.
Asset Yantra examines the top 7 Myths regarding the real estate sector.
Can you invest in real estate without investing in property?
- Real Estate Investment Trusts (REIT)
A REIT is a specialized company that invests in commercial real estate through debt and equity. Introduced in 1960 to provide investors with the chance to participate in real estate as an asset class. REITs are recognized to provide a minimum 7-8% annual return to small & medium investors.
According to the REIT requirements, at least 80% of the value must be invested in revenue-generating properties. With the remainder invested in under-construction projects.
- Wholesale Real Estate
Real Estate wholesaling is an excellent option for people to get started in the real estate sector without investing a lot of money. It is a type of property flipping in which the investor, also known as wholesaler, agrees to purchase a property that they feel in underpriced. The wholesaler gets money through a charge tied to the transaction, which is generally a percentage of the total property cost.
- Mutual Funds for Real Estate
Real estate mutual funds are an excellent strategy to diversify your real estate portfolio. The principle is similar to that of a mutual fund in that the investor owns a piece of the mutual fund while the corporation owns the investment. Earnings are distributed in the form of a dividend or a portion of share appreciation.
- Platforms for Online Investing
Online real estate investment platforms aggregate funds from several individuals and invest on their behalf in possibilities that would otherwise be too expensive to pursue. The medium, on the other hand, is best suited for people who can afford to leave their assets unbroken for a lengthy period.
- Loans made with hard money
A hard money loan is a loan made by a person for a real estate investment. Hard money loans, often known as bridge loans, are short-term loans used to fund an investment project. Typically, the lender lends up to 65-75% of the property’s value and receives interest, which is often greater than on traditional property loans.
Myth vs Facts in Real Estate
Real estate investment may be both exciting and complicated for first-time investors. Even after significant investigation, it is difficult to separate the truth from the false material that circulates on the internet.
Here are a few typical fallacies to avoid as a real estate investor.
- Myth: Developers purposefully postpone projects
Fact: One of the most prevalent concerns consumers have about the real estate market is that projects are being delayed. Distressed customers frequently claim that developers purposefully delay developments to increase profits. “Developers never postpone projects by choice,” says Rohit Gera, MD of Gera Developments.
The efficiency of urban municipal and civic agencies. Which manage constraints on project development through approvals, has a significant impact on the process of real estate construction in India. Development projects in Indian cities are subject to a lengthy clearance procedure. Which typically takes 24-36 months before construction & 6 months to a year after completion.
- Myth: Your purchasing choice should be influenced by market conditions
Fact: While the assertion is largely fair, many first-time investors do not consider their affordability before making a purchase selection. When people can afford it, they should enter the market. If you secure a house loan early in life, you will be able to purchase your home sooner than those who wait.
Using one can aid you in assessing your present financial health by reviewing your current income, existing assets, obligations such as other debts, insurance, investments, and house purchase plans.
- Myth: Real estate investing is exceedingly dangerous
Fact: The real estate market is frequently seen as exceedingly dangerous. The current state of the market, with delayed projects, sluggish demand, and rising prices, does not assist to validate the fallacy. Real estate investments reach their full potential when kept for an extended period.
Short-term real estate investments are more likely to result in losses. “The wise thing to do is to take measured risks and keep onto investments for a longer length of time,” Rohit Gera says.
- Myth: Real estate is always profitable
Fact: On the other hand, some people think that property values constantly rise and the real estate investments should always provide big returns. While the property does not lose value over time, making a limitless profit is not a realistic expectation. Real estate prices and profits fluctuate as well, and there have been cases where values have plummeted owing to a lack of demand.
- Myth: Big brands always provide the greatest results.
Fact: According to experts, it has emerged as the most common misperception in the real estate market, since major companies have failed to meet their claims of quality and timely delivery. On the other hand, there are many mid-and small – scale developers that are devoted to delivering the best in terms of quality and amenities.
- Myth: Developers want prices to continue to rise
Fact: Constantly growing prices are also unfavorable to the developer community. “Price increases are welcomed only if they are in line with inflation,” says Rohit Gera. He says that if a developer sells a property at a high price, obtaining land for the following building will become prohibitively expensive.
- Myth: The activity is limited to major cities
Fact: Metropolitan areas are increasingly overcrowded and unaffordable to the working class. The middle-income group (MIG) is the primary driver of residential demand, and as a result, the focus is shifting to expanded suburbs and tier II and III areas like Ahmedabad, Indore, Ludhiana, Coimbatore, and Lucknow.
You may highlight the greatest characteristics of your home during an open house. This is especially beneficial if your property contains technology amenities that will appeal to the tech-savy and younger generation.
Conclusion
Furthermore, you may have an open house online by offering prospective buyers an online tour of the home without requiring them to leave their homes. Again, this is especially beneficial for the tech-savvy and younger population, since they are already used to utilizing technology.
Asset Yantra & Gak Group is a real estate investing platform with a long history of satisfied consumers. Along with asset security, the organization takes every precaution to ensure that an investor’s experience is pleasant and worthwhile.